Telcos urge Trai to lift ban on differential pricing of data services

The latest letter has sought clarity from the regulator on two aspects.

ET Bureau

Updated: May 16, 2016, 21:29 IST

NEW DELHI: Telcos have urged the Telecom Regulatory Authority of India (Trai) to lift its ban on discriminatory pricing of data services, saying that a clause that exempts products offered over closed electronic communication networks (CECNs), or intranet, has created confusion and can lead to futile investments for carriers.

In a letter dated May 16, Cellular Operators Association of India (COAI), the GSM industry body, asked the Trai “to review its decision of the CECN network and allow differential tariffs on the basis of content irrespective of whether such content is provided through the closed network or open internet”. COAI represents top telcos such as Bharti Airtel, Vodafone India, Idea Cellular, besides Reliance Jio Infocomm.

The request comes within three months of the telecom regulator disallowing discriminatory pricing of data services, effectively prohibiting controversial zero-rated products such as Facebook's Free Basics and Airtel Zero with a maximum Rs 50 lakh penalty for violators.

The argument put forth by the COAI for a revocation is lack of clarity in the regulator’s order. The industry body has argued that regulator has allowed discriminatory pricing of data services in case the data is provided over closed electronic communication network (CECN), or intranet.

However, the COAI has said that the regulator has failed to provide clarity over what a host of issues pertaining to CECN, including what exactly is CECN.

In such a situation, the lobby group has argued, operators might expend a lot of their time and resources in developing new products which might “inadvertently” violate the ban imposed on discriminatory pricing of data services. “In such cases TSPs (telecom service providers) and/or developers’ huge investments, time resources will go waste,” Rajan Mathews, director general COAI has said in a letter to Sudhir Gupta, secretary at Trai.

Shubho Ray, the president of Internet and Mobile Association of India (IAMAI) – a vocal backer of a free and equal Internet, has said such a demand effectively means the industry body is requesting the regulator to do away with net neutrality as banning discriminatory pricing of data services is the backbone of the concept of net neutrality.

“If somebody is requesting the regulator to permit discriminatory or differential pricing for data services, then effectively they are asking the regulator to end net neutrality,” Ray told ET.

While the net neutrality backers and advocates of a free Internet have said the exemption to CECNs is a loophole that could be used by telcos to offer data services at differential rates. Trai has maintained that the regulation on data pricing was quite clear, in that whatever isn't a part of the Internet won't fall under the new regulation. And whatever is, will be covered.

The latest letter has sought clarity from the regulator on two aspects.

Firstly, whether a telecom service provider could share advertising revenue with a content provider who is providing ‘exclusive’ content to the telco’s subscribers at a subsidized rate.

Secondly, whether a content provider could offer subsidized subscription of its content to select or all subscribers of any telecom operator, will that constitute a CECN.

The letter comes within weeks of the country’s largest telecom operator, Bharti Airtel seeking the regulator’s approval to enter into a partnership with a global content provider to provide “exclusive content” to its subscribers.

The letter comes at a time the telecom regulator is expected to float a consultation paper on the larger concept of net neutrality including, prioritizing, blocking and throttling of content, three months after it addressed the issue of discriminatory pricing of data services.

Jio’s Rs 2,399 annual plan offers 2GB per day data that costs effectively Rs 200 per month. It also offers unlimited voice and SMS. Airtel and Vodafone Idea’s Rs 2398 and Rs 2399 annual plans, on the other hand, offer 1.5GB per day data along with unlimited voice and SMS